High capacity optical transmission systems require high spectral efficiency due to finite bandwidth of optical amplifiers and/or transmission medium (e.g. optical fiber). High spectral efficiency not only leads to larger aggregate capacity but also provides better tolerance to chromatic dispersion and polarization-mode dispersion (PMD). Spectral efficiency of modulation formats can be increased by using multilevel modulation and by encoding information in additional degree of freedoms. A preference for spectral-efficient transmission systems is direct detection to allow simple receiver structures free of local oscillators.
At the optical frequency, polarization is an additional degree of freedom that can be used to carry information. For example, Polarization-Division Multiplexing (PDM) can effectively double spectral efficiency by transmitting two independent channels simultaneously in orthogonal State of Polarizations (SOPs) at the same wavelength. In conventional PDM systems, dynamic polarization control is required at the receiver to track the SOP of the incoming signal because it may not be preserved during transmission. Another highly desired feature is constant intensity. Constant intensity modulation format is more robust against optical nonlinearities in transmission.